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UPM to Close Its Myllykoski Paper Mill

November 3, 2011
HELSINKI, FINLAND—Nov. 3, 2011—UPM will permanently cease production at the Myllykoski paper mill by the end of this year. The company and its employees were unable to establish a way to meet the commercial requirements for continuation of operations at the mill during employee negotiations. In addition, the manufacterer is cutting down its overlapping operations in paper sales, the supply chain and its functions in Finland.

The personnel reductions will affect 371 people at the Myllykoski paper mill and 21 people at Myllykoski Corp. and Myllykoski Sales Nordic. Personnel reductions will start in January 2012.

During the negotiations, issues such as pension schemes, relocations within the company, retraining and ways to alleviate the effects of redundancies were discussed. UPM will implement a program— called “From Job to Job”—to support its employees during the transition.

“The Myllykoski mill has been making a loss for several years despite numerous measures aimed at making the operations more efficient. The mill’s cost competitiveness is weak. The high costs of raw materials and energy have further increased total costs and permanently damaged the mill’s opportunities to reach a profitable level,” stated Jyrki Ovaska, president, Paper Business Group.

The declining economic situation has worsened the mill’s situation this autumn. Alternative, profitable uses for the mill inside UPM’s businesses have not been found.  

The aim of these cuts is to improve the profitability and cost-effectiveness of UPM’s European paper business and adapt the company’s paper production to the needs of its global customer base.

“This is a heavy day for Myllykoski people. However, it’s important to face the realities and to look ahead. UPM will support re-employment and training of Myllykoski personnel,” commented Jyrki Ovaska.

“From Job to Job” program

UPM will support the re-employment of those being made redundant by implementing several voluntary measures in addition to its statutory obligations:

• €1.5 million will be invested in training, focusing on re-employment.

• Those losing their jobs will be encouraged to become entrepreneurs and will be offered a business start-up allowance. A total of €1 million will be set aside for this purpose. The allowance per business is usually €20,000. €30,000 is the maximum amount that can be obtained, depending on how many people are employed by the business.

• People who move to a new location for their new job will receive a moving allowance and their moving costs will be reimbursed until the end of 2013. UPM will now also offer this support to former employees who are not employed by UPM.

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